Inside Accreditation
Volume 6, Number 1, June 14, 2010



Judith S. Eaton

Are we “selling accreditation” – automatically transferring accredited status – when investors in higher education purchase accredited nonprofit institutions and convert them to for-profit operations?  In spite of recent headlines and accusations, I think not. Accreditation oversight is very much a part of these purchases. We need this scrutiny to become even more muscular.

The latest spike of interest in for-profit higher education has included attention to acquisition of nonprofit institutions, with some 16 purchases in six years, according to Dan Golden of Bloomberg Businessweek (March 4, 2010). The buyers of these campuses are clear that the accredited status of the school is one of its more attractive features, especially if it is the regional accreditation that is typically granted to over 3,000 nonprofit degree-granting colleges and universities.

Why the attraction? Accredited status, the result of an external review of academic quality in higher education, is vital to colleges and universities. Unless an institution is accredited by an organization acknowledged by the federal government, the college or university is not eligible for federal and often state funds. This means that students cannot obtain grants and loans and an institution cannot compete for federal research or program funding. Unless the institution is accredited, transfer of credit is difficult or impossible for students.

One investor in the for-profit sector has even put a market value on regional accredited status, estimating its worth at $10 million. Purchase is viewed as a short cut to regional accreditation by some investors, especially when compared to the usual amount of time required to apply and obtain this status. Investors are open with regard to their interest in obtaining regional accreditation for their schools as quickly as possible, believing that this further enhances a college or university’s prestige and competitiveness.

If this accreditation were being “sold,” it would be a highly undesirable practice. Newly owned institutions could undergo major changes without any external scrutiny for quality. The mission of an institution could be transformed overnight, perhaps with little attention to the financial and other capacity needed to realize success associated with this fundamental change. Curriculum, faculty and student services that once met accreditation standards could be immediately altered in undesirable ways. Continued access to federal and state money that comes with an accreditation would no longer be accompanied by appropriate accountability to students, the public and government. The public interest would not be served.

However, accreditation is not being sold. An examination of the standards and policies of the seven regional accreditors and seven national career-related recognized institutional accrediting organizations that are most involved when an institution is purchased makes it clear that (1) accreditation is not automatically included in the package of assets that investors obtain in the course of a purchase and (2) considerable scrutiny of these purchases is standard practice. The accreditors are protecting students and serving the public interest through their oversight and monitoring.

These 14 accreditors move expeditiously to monitor and examine changes associated with a purchase. All have standards and policies that require institutions to (1) inform the accreditor in advance of the change of ownership or change of control, (2) provide justification and evidence of capacity that quality and service to students will be maintained and enhanced and (3) submit to an accreditation review (either comprehensive or more limited) following the purchase, accompanied by subsequent ongoing scrutiny. Some accreditors immediately remove accreditation from a purchased institution if these conditions are not met. Others put accredited status in “abeyance” pending a review of the purchased institution.

Even more muscular oversight of the purchase of accredited institutions can result in greater accountability from investors and institutions. Especially valuable practices here, some of which are currently employed, are to:

  • Terminate accredited status of an institution in the event that a purchase has not been approved by the accreditor, as indicated above. 
  • Terminate accredited status in the event that the mission of the purchased institution is dramatically altered – and has not been approved by the accreditor. 
  • Assure that scrutiny of the purchase of an institution includes examination of an investor’s history of prior purchase of institutions. What has happened to academic quality when this person or company previously acquired a college or university?
  • Emphasize practices that assure seamlessness of accreditor oversight of purchase, starting with initial approval of the purchase through at least the first two years of operation of the purchased institution, including detailed academic and business plans. What is happening with faculty, curriculum, instructional delivery, finance, governance?  
  • Post a succinct statement to the public when a purchase is taking place, explicitly describing the oversight and monitoring and affirming that accredited status of an acquired institution does not automatically transfer to a new owner. Require that the institution post this statement as well.

Students, the public and lawmakers all rely on accreditation to have confidence in the quality of colleges and universities. The accrediting community continues to serve the public interest through its increasingly robust oversight of the purchase of institutions.

Inside Accreditation is a publication intended to keep presidents of CHEA member institutions informed about developments in external quality review of higher education.

One Dupont Circle NW, Suite 510
Washington DC 20036-1135
(tel) 202-955-6126
(fax) 202-955-6129

© 2010 Council for Higher Education Accreditation. Terms of Use.